hidora,
if things have come to a head, and if clearly MIL's fault, take the opportunity to tell ur HB u want to live in own home w/o them.
my HB only child, we r NOT living with them. Familarity breeds contempt lah, sure conflict under 1 roof for my case. Now quite gd, I bring my #1 over to them often, give them alot of face cos #1 bonds well with them (relatives during CNY envy them). We go over for meals often too.
Return the $4K lah. And if she insults ur family again, just respond, dun take it lying down. In my case, HB din wan to give mthly allowance to MIL cos they r comfortable, instead we give huge angbaos at CNY/ b'day. When I was expecting #1, she kept saying WE must save money for baby expenses and so on. Then suddenly in final trimester, MIL-DIL very strained lah, and she cried to my HB that we never gave her money blahblahblah. My HB wrote cheque to her- several $K can't recall how much liao, throw to her lor! THEN she mumbled that she only say-say-complain only, listen-1-ear-in-out can liao, no need to be so siao to actually give her the $. *rolls eyes* I was quite mad cos I felt it was hypocritical of her to tell us to save $, and then contradict herself by demanding money at last minute. This time #2, SHE gave ME $500 for foetal nutrition, she give, I take. If she ever complains, I'd throw it back to her.